New Amtrak president says quick action by Congress needed to avert shutdown

Associated Press
Wednesday, June 19, 2002

WASHINGTON - Amtrak's new president says the railroad needs financial assistance very soon to prevent a possible shutdown of all service next month.

``We are running out of time,'' said David Gunn, who joined Amtrak just a month ago. He said the nation's passenger railroad needs ``a loan guarantee, a grant, an appropriation'' to help it fill a $200 million budget gap.

In an interview Tuesday with The Associated Press, Gunn said Amtrak officials are planning how to shut down service in an orderly manner. Planning for such a contingency ``is the responsible thing to do,'' he said.

A transit turnaround expert known for his blunt talk and back-to-basics approach, Gunn gets a chance to make his case Thursday when he testifies before the Senate Appropriations subcommittee that oversees Amtrak.

With its future being debated in Congress, Amtrak has struggled to satisfy its auditors that it will operate for at least another year. That in turn has hurt its ability to gain access to a line of credit essential for its survival until the new fiscal year begins Oct. 1.

Financial crises are old news for Amtrak. But supporters of the nation's passenger railroad say they hope the new warning carries more weight because it comes from Gunn.

Already, Gunn has ordered a company reorganization that will consolidate decision-making at Amtrak headquarters in Washington and slash the number of employees with the title ``vice president.''

He abruptly jettisoned a corporate consultant hired by his predecessor. He repealed orders that passengers be called ``guests.'' He plans to de-emphasize Amtrak's ``satisfaction guarantee,'' which rewards any unhappy passenger, for any reason, with a coupon good for future travel.

``If you look at our on-time performance and the condition of our equipment, 'satisfaction guaranteed' is not a particularly good slogan for us at this point in our history,'' he said.

Amtrak lured Gunn, who turns 65 this week, out of retirement on his family's farm on Cape Breton Island, Nova Scotia. Amtrak is paying him an annual salary of $275,000.

Gunn, a dual citizen of the United States and Canada, succeeded George Warrington, who left Amtrak to head New Jersey's bus and rail agency.

Amtrak's governing board had expressed full support for Warrington during his four years there.

Yet in Gunn, they chose a straight-talking successor who has made no secret that he disagrees with many moves Warrington made.

``George has a different management style from David, and David has a different management style from other people,'' said Amtrak Vice Chairman Michael Dukakis. ``I like them both.''

Gunn worked for the Massachusetts Bay Transportation Authority when Dukakis was governor of the state. Dukakis called him a plainspoken ``pro's pro.''

``He's a little more diplomatic than he used to be,'' Dukakis joked, ``but not much.''

A Harvard Business School graduate, Gunn describes himself as ``a focused, no-nonsense manager.''

``When I get called, it's generally because there's an operational or financial problem and people have decided it's time to cease talking about it and do something,'' he said.

Gunn said the troubled transit agencies he has taken over, including Amtrak, share several characteristics: physical deterioration, a serious decline in management control, an exodus by technically skilled employees and a need for money.

In New York, where Gunn solidified his reputation as a turnaround artist, he took over the city's crumbling subway system at an opportune time in the mid-1980s, just as billions of state and federal dollars began to flow to transit.

He said money is key to solving Amtrak's problems, but so is better management.

``We have an enormous credibility problem on (Capitol) Hill,'' he said. ``I've got to demonstrate by actions, in the way we do our budgets and the information we make public, and by the results, that we aren't a bottomless pit, that we can manage effectively.''

Gunn's plan includes cutting the number of senior managers and submitting a 2003 budget that lists and prioritizes all the maintenance and repair work Amtrak has long deferred.

He is sticking with Warrington's request for $1.2 billion in federal aid for 2003 but has repudiated his predecessor's threat to eliminate 18 long-distance trains this fall if Congress fails to provide that amount.

``I will not participate in the dismemberment of our company,'' he wrote to employees.

Copyright 2002 Associated Press
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